Makkah Construction and Development (4100) Q2 2025 earnings summary

Executive summary

• Achieved record profits and 16% year-over-year revenue growth to SAR 624 million, with net income up 15% to SAR 294 million in H1 2025, driven by asset enhancement, strong commercial mall performance, and strategic execution.

• Commercial mall occupancy reached 99% with a 16% increase in average lease rates; hospitality segment saw an 11% ADR increase, offsetting a slight occupancy decline to 82%.

• Hajj segment experienced over 750% growth in pilgrims served, with a shift to B2B contracts resulting in lower revenue per pilgrim but successful market penetration.

• Strong balance sheet and robust cash position support ongoing growth initiatives.

• Interim consolidated financials for H1 2025 were reviewed with no material misstatements found by the independent auditor.

Financial highlights

• Revenue for H1 2025 reached SAR 624 million, up 16% from SAR 536 million in H1 2024; net income increased 15% to SAR 294 million; EPS at SAR 1.47.

• EBITDA grew 13% year-over-year to SAR 320 million; free cash flow increased 10% to SAR 164 million.

• Cash position at period end was SAR 828 million; gearing ratio improved to negative 22%.

• Operating cash flow increased 6% to SAR 176 million.

• Basic and diluted EPS for the six months was SAR 1.47, compared to SAR 1.28 year-over-year.

Outlook and guidance

• Hotel RevPAR expected to maintain improvement trends; commercial mall leasable area projected to reach 16,000–16,200 sq m by year-end, with lease rates stable.

• Hajj service net income anticipated to remain at 2024 levels; commercial mall enhancement scheduled for mid-2026 completion, targeting SAR 60 million additional annual income.

• Hotel renovation to be phased through 2029 to avoid high season disruption; post-renovation ADR expected to rise by ~20%.

• Management notes interim results may not reflect full-year performance due to seasonality, with higher revenues expected during Hajj and Umrah seasons.